"Republicans have begun to panic that the unease in the public is going to be taken out of their hide."

New poll detects a change in the political climate in the Capitol

Dec. 30, 2006

By Bud Kennedy
Fort Worth Star-Telegram
Copyright 2006

The earth shook in Austin this week, and not only because two of our Republican neighbors decided to try to bring down the overbearing West Texas tyranny in the Texas House.

Early tremors had already jolted House Speaker Tom Craddick of Midland, now rejected by two of his lieutenants and challenged from inside his own party.

Then came The Poll.

Texas Democrats have pulled even with Republicans, and the state is now about half red, half blue. At least, that's according to 1,053 Texans surveyed by an independent Democratic pollster.

The poll's news announcement focused on one specific response: By 46 percent to 35 percent, respondents said Democrats "care" more about "people like me." That's a reversal from two years ago.

But most eyes went immediately to the bottom line of the poll, conducted in early December by Austin-based Montgomery & Associates:

Asked which political party they lean toward, 45 percent chose Democrat.

Only 43 percent chose Republican. If you figure in the poll's margin of error, that's a tie.

Two years ago, in the same Democratic poll, Republicans led by 55 percent to 34 percent.

Pollster Jeff Montgomery returned a phone call Friday from San Antonio, on his way to a bipartisan college football weekend watching the Texas Longhorns in the Alamo Bowl.

The poll doesn't mean Democrats are about to take back the Capitol, he said. He surveyed 1,053 adults, not specifically voters.

"Clearly, Texas is still a Republican state," he said. "But this is the first time people have even shown much interest in calling themselves Democrats."

If Craddick was already on his way out -- and it's beginning to look that way -- the poll certainly helped Plano investor Brian McCall and Waxahachie lawyer Jim Pitts give him a shove. Republicans are slipping in the Texas House under Craddick's leadership, and McCall and Pitts suggest choosing another speaker Jan. 9.

"There is an attitude change nationally that is affecting Texas," said Cal Jillson, the Southern Methodist University political science professor who correctly foresaw a Republican sweep of state offices in the November elections and also the Democratic gains in the Texas House.

"People are increasingly concerned with the results they see from the Republican majority," he said. "In Austin, those numbers are playing themselves out in the hanging of Tom Craddick. Republicans have begun to panic that the unease in the public is going to be taken out of their hide."

Craddick's leadership team has taken a pounding in the last two elections. Arlington voters soundly rejected state Rep. Kent Grusendorf, who had shaped state education policy. Two years earlier, Fort Worth voters bounced state Rep. Glenn Lewis, a Forest Hill Democrat who had lined up with Craddick on school vouchers.

Democrats picked up six Texas House seats this year and have cut Republicans' edge to 80-69, with one seat still to be decided in a special election.

The Republicans couldn't even pick up an open House seat north of Lubbock, where Craddick backed a Plainview Republican who outspent his Democratic opponent 5-to-1 but still lost.

Jillson said the Democrats' success came because voters are unhappy with President Bush, Congress and Washington.

But they're not all that happy with Austin, and particularly not with the Texas House.

"People are looking at [Gov.] Rick Perry" -- re-elected despite drawing only 39 percent of the vote -- "and even more starkly at Craddick, and they're saying, 'I don't see problem-solving. I see a fairly mean-spirited partisanship.'"

Jillson compared Craddick to the deposed U.S. House majority leader, also from Texas: "He's a two-bit Tom DeLay."

Republicans' popularity peaked in 2002 and 2004, Jillson said. The shifting Texas numbers are also affected by demographic changes, with more Texans of Hispanic descent reaching voting age, but the political shift is outpacing the shift in population, he said.

In Dallas on New Year's morning, an entire slate of Democrats will be sworn into office in a ceremony at a hotel, replacing the Republican officials and judges who used to run the Dallas County Courthouse. That was the result of the county's abrupt population change, Jillson said.

"But mostly, it's an attitude change," he said. "Out in East Texas, you're starting to see more people talk about the Democrats."

Montgomery, the Austin pollster, said his poll was not timed with the Texas House speaker's election.

"We didn't think this would have anything to do with the speaker's race," he said. "It's a Texas poll, but I think it's more about Washington."

Maybe. But it's hitting first in Austin.

By the numbers

Political parties Texans say they lean toward:

2006 2005 2004
Democrat 45.1% 37.2% 33.9%
Republican 42.6 49.2 54.7
Independent 6.4 10.5 10.2

SOURCE: Montgomery & Associates
Bud Kennedy's column appears Tuesdays, Thursdays and Saturdays. 817-390-7538 bud @budkennedy.com


© 2006 Fort Worth Star-Telegram: www.dfw.com

Goldman Sachs pays lip service to glaring conflicts of interest in toll road deals

Toll Road advisor jumps on road to gold

Goldman Sachs fund has $6.5 billion to invest

December 29, 2006

Bloomberg and Times staff
Northwest Indiana Times
Copyright 2006

Goldman Sachs Group Inc., the investment bank that advised Indiana on its historic Toll Road lease, has raised $6.5 billion for its own fund to invest in toll roads other infrastructure projects.

GS Infrastructure Partners will focus on "larger investment opportunities in developed markets," the New York- based firm said Thursday in a statement.

Those will include toll roads, airports and ports as well as regulated gas, water and electric utilities, according to the statement.

Goldman Sachs reaped a $20 million fee earlier this year from the state of Indiana for marketing the 157-mile Indiana Toll Road to investors and providing other investment banking services.

A Spanish-Australian consortium, Cintra Macquarie, submitted the winning bid of $3.85 billion to operate and collect tolls on the Indiana Toll Road until 2081.

At the time, Macquarie predicted the Toll Road would yield a 12.5 percent annual return for investors.

Those kinds of returns have sparked interest among U.S. investment firms in toll roads and other infrastructure. Up until now, foreign firms have dominated the field.

Goldman put $750 million of its own money in the new infrastructure fund. Other investors include pension funds, banks and insurance companies.

City and state governments in the U.S. oversee about $1.7 trillion of roadways, and billions more in other assets, from subways to sewers.

At least 13 U.S. states may hire private companies to help build and operate $34.5 billion in toll roads spanning 2,700 miles, according to the Federal Highway Administration.

Securities firms investing in such projects while also seeking advisory fees from government officials have raised concern in Chicago and other cities that the two businesses may be at odds.

Goldman was among 48 firms that registered interest in leasing the 537-mile Pennsylvania Turnpike, according to a list released by the state this week. Other rivals competing for the business include Bank of America Corp., Bear Stearns Cos. and Merrill Lynch & Co.

Pennsylvania Governor Ed Rendell is considering the move to plug a $1.7 billion shortfall in transportation funding.

Goldman had hoped to advise Chicago on the potential sale of Midway Airport after helping the city lease the Chicago Skyway two years ago. Dana Levenson, the city's chief financial officer, decided Goldman's plan to buy an airport company in Europe that might eventually bid for Midway disqualified the firm from the Midway assignment.

The firm said in a statement in July that it handles the conflict-of-interest question by examining each situation individually.

"We take conflict and business selection issues seriously," spokesman Michael DuVally said at the time.

Times Business Writer Keith Benman contributed to this story.

© 2006 The Northwest Indiana Times www.thetimesonline.com

Support for TTC enabler Craddick "on the verge of collapsing."

Craddick's committee leaders defect

12/29/06

By JOHN MORITZ
Fort Worth Star-Telegram
Copyright 2006


AUSTIN -- Two members of Texas House Speaker Tom Craddick's Republican leadership team defected Thursday, with one declaring his candidacy to run the 150-member chamber and another casting his lot with another Craddick challenger.

State Rep. Jim Pitts, a Waxahachie Republican appointed by Craddick two years ago to run the powerful House Appropriations Committee, said he jumped into the race after concluding that Craddick is too wounded to win a third term as speaker. Pitts also said that Craddick's first Republican challenger, Rep. Brian McCall of Plano, is unlikely to succeed because he is considered too closely aligned with Democrats in the GOP-dominated chamber.

"It looks like one candidate is being supported pretty exclusively by Republicans and another candidate is being supported exclusively by Democrats," Pitts said at a Capitol news conference. "We just need to put [the two camps] together and elect a speaker."

Pitts' entry into the speaker's race capped a whirlwind day in Austin that began with McCall trumpeting the support of Rep. Robert Talton, a conservative Republican from Pasadena whom Craddick had named chairman of the House Urban Affairs Committee. Talton said in a statement that McCall would prove less authoritarian than Craddick and would "allow members to vote in a manner that best represents their districts."

Soon after Talton made his announcement, Democratic Rep. Senfronia Thompson of Houston dropped her bid to become speaker and threw her support to McCall, sending ripples through the Capitol that support for Craddick was on the verge of collapsing.

Craddick then weighed in, releasing a list of 84 members who had "reconfirmed their unequivocal support" for his re-election Jan. 9, more than the 76 votes he would need to retain power. Included on the list was Pitts, who said that he informed Craddick earlier this week that his support was eroding.

"I told Tom Craddick that if he couldn't get there, that I would run," Pitts said.

Alexis DeLee, Craddick's press aide, said the speaker remains confident that his support will hold. And she disputed the suggestions expressed publicly by Pitts and Talton, and privately by several other members, that Craddick uses "arm-twisting" tactics to secure votes on issues important to him.

"Members do vote their districts 98 percent of the time," DeLee said. "They always have."

The election of a speaker is usually the first order of business when the House convenes for its regular session the second Tuesday of each odd-numbered year. In most cases, the vote is a formality because the winning candidate has lined up the necessary support well in advance.

The speaker wields great power in the House because he or she appoints all committee chairmen and controls the flow of legislation on the House floor. The speaker is also co-chairman of the Legislative Budget Board, which has the power to adjust state spending when the Legislature is not in session.

Craddick, a House member from Midland since 1969, assumed power four years ago after Republicans gained control of the chamber for the first time since Reconstruction. Most Democrats have long been frustrated by his hardball style, but fissures in his Republican base were exposed during this year's special session on school finance, and after several GOP members found themselves in spirited primary races where their opponents were heavily financed by Craddick allies.

Meanwhile, key members of Craddick's leadership team, including Kent Grusendorf of Arlington, were defeated in the March GOP primary. Then in November, Democrats picked up six additional House seats.

McCall's camp boasted of having 73 supporters early Tuesday, but has not released their names because many fear retribution if Craddick wins. Pitts, a 14-year House veteran, also declined to release the names of his supporters, saying only that many have approached him to become the compromise choice.

"I realize that this chamber is somewhat divided and that we have a very difficult session ahead of us," Pitts said. "But at the end of the day, I believe that all of the members are looking for a way to vote their districts and serve together."

In the know

Jim Pitts
Age: 59
Hometown: Waxahachie

Family: Widowed, two daughters, one son
Party: Republican
Occupation: Lawyer

Experience: Member of the Texas House since 1993; chairman of the Appropriations Committee 2005-present


© 2006 Fort Worth Star-Telegram: www.dfw.com

Moody's: Leasing the roads to someone else removes the political obstacles to raising tolls."

U.S. May Finally Warm Up to Toll-Road Sales in 2007

12/29/06

By Joe Mysak
Bloomberg
Copyright 2006

Maybe 2007 will be the year when we all sell the streets.

I know, I know, states and localities don't actually "sell'' their toll roads -- in return for a big chunk of cash, private companies such as Australia's Macquarie Infrastructure Group and Spain's Cintra Concesiones de Infraestructuras de Transporte SA lease them for 50, 75 or 99 years, and collect the tolls.

Such transactions have been done in Chicago, in Indiana, and in Virginia, and lawmakers in New Jersey, Pennsylvania and Texas seem to be looking hard at the possibilities.

People still haven't seen enough of these deals to get very comfortable with them. There's a lot of second-guessing going on, as critics scrutinize what it means to enter into one of these lease transactions.

What's holding them up? Just a few years ago, in the summer of 2005, Merrill Lynch & Co. estimated that there were potential candidates for toll-road privatization in 22 states. The problem doesn't seem to be that people believe states and cities can operate toll roads better than anyone else. Instead, what's worrying everyone is: Are we getting the right price for one of the few cash cows we possess?

Something tells me that the tipping point might well be reached in the new year. Put together another two or three multibillion-dollar deals, and public officials will all be wondering why they are in the toll-road business, anyway.

No Free Ride

Moody's Investors Service rates $47 billion in bonds sold by states and municipalities for toll roads, and liked the idea of privatization well enough in a report on the subject published in September.

For one thing, the report said, leasing the roads to someone else removes the political obstacles to raising tolls. Not raising tolls "can lead to pressure on financial margins, lower debt service coverage ratios and elevated credit risks,'' according to Moody's.

Rating companies like things such as fees and tolls, and especially taxes.

Politicians really hear it when tolls are increased. Most Americans still seem to subscribe to the notion that, at some point, toll roads have been "paid off,'' and that the toll booths should come down. In reality, of course, there's no such thing as a free ride, except on the federally financed Interstates.

Transfer Risk

Leasing toll roads means transferring operating, maintenance and construction risk. Moody's said it views this in "a generally positive light,'' so long as governments make sure that the private operators keep up their end of the bargain.

That's a key point to keep in mind about these transactions. States and municipalities aren't selling their roads; and private operators can't just roll them up and make off with the things in the middle of the night. The owners have extensive oversight responsibilities.

The future for toll-road leases is pretty bright, at least from the states and localities' point of view.

That's because everyone wants to get involved in this business. There just aren't that many more opportunities in Europe, for example. Add to that a weaker dollar, and what Moody's termed "a lower perceived risk profile for U.S. assets'' compared with those in the developing world, and you begin to see where the real risk lies.

It's not that the current owners, if they play their cards right, won't get enough for their toll roads. The real risk is that the new operators will pay too much.

Think about it in the same terms as why hedge-fund returns are falling. They say too much money is chasing too few opportunities.

Pay Up

This is why states and municipalities are sitting pretty. Some may have budget deficits, while others may want to address pension and other post-employment benefit shortfalls. But there are no panic sales of turnpikes and parkways.

Earlier this month, Pennsylvania released a list of the firms that have expressed interest in leasing the 537-mile (864- kilometer) Pennsylvania Turnpike. The next step will be for the state to decide to invite some of those firms in for a chat.

The real story, though, is how many expressions of interest the state received: 48.

Everybody wants a piece of the U.S. toll-road business.

To get it, they will have to pay up.

(Joe Mysak is a Bloomberg News columnist. The opinions expressed are his own.)

To contact the writer of this column: Joe Mysak in New York at jmysakjr@bloomberg.net

Last Updated: December 29, 2006 03:00 EST

© 2006 Bloomberg: www.bloomberg.com

More bad math used in tolling Texas 121

State needs lessons in arithmetic

The state spent 30.8 cents on postage to mail Don Ferguson a bill for 25 cents for driving on a toll road.

Dec. 28, 2006

By GORDON DICKSON
Fort Worth Star-Telegram
Copyright 2006

ARLINGTON -- Don Ferguson is no scofflaw, his wife, Marilyn, says, so he'll pay the 25 cents he owes for driving on Dallas-Fort Worth's first all-electronic toll road.

But he won't pay quietly.

The 72-year-old military retiree was befuddled last week when an invoice for 25 cents arrived from the Texas Department of Transportation, which began charging tolls Dec. 1 on Texas 121 in Denton County.

The charge won't cover the 30.8 cents metered postage the state paid to send him the bill.

"I thought about taping three dimes to the invoice and asking them to send me change," said Ferguson, who drove on the road -- which has no toll booths -- while visiting a son Dec. 2 in Frisco. "But I've decided I'm going to send them a $1 check, so my account will have a credit of 75 cents."

Drivers with no TollTag have their license plates photographed, and a bill is mailed to them. For some reason, the automated system didn't charge Ferguson a customary $1 handling fee to cover postage. Agency officials are trying to figure out why.

"I got a bill for 25 cents, too," department spokesman Mark Ball said, adding that at least four other drivers have complained.

© 2006 Fort Worth Star-Telegram: www.dfw.com

"We can't trade transportation infrastructure for a few bucks up front, because, in the end, we'll be much poorer, and much less safe."

Privatizing New Jersey's Toll Roads

Highway Robbery

December 28, 2006

By ANTHONY COWELL
CounterPunch
Copyright 2006

Governor Jon Corzine intends to sell New Jersey's toll roads to private investors for $10 billion. Selling or leasing publicly owned toll roads degrades our public and financial security. Toll road takeovers led by Goldman Sachs, where Governor Corzine was the Chairman and CEO before taking elected office, prove the point.

Goldman Sachs took the Indiana Toll Road and the Chicago Skyway private in 2005. Goldman invested its own money in both deals. Goldman worked every side of these deals, collecting fees as lobbyists, deal makers and investors.

After privatization, tolls on the Indiana Toll Road and the Chicago Skyway immediately doubled. Drivers unable to afford the tolls now use alternate roads, increasing congestion and pollution. But these severely negative impacts to the public don't concern MIG Cintra, the Australian and Spanish corporations that operate these toll roads. MIG Cintra's motivator is greed. MIG Cintra prohibits any competition with its toll roads. It forbids any expansion of adjacent roads. And when MIG Cintra took over the Indiana Toll Road, the 600 people formerly employed by the Indiana Department of Transportation were told to start looking for new jobs. MIG Cintra holds a locked down monopoly where states must pay protection cash to a toll road mafia led by Goldman Sachs, foreign corporations, and super rich investors.

MIG Cintra uses "access management" schemes to squeeze every possible dollar from toll road users. "Time of day pricing" imposes punitive tolls on certain vehicles, like trucks, to keep them off the road. "Premium pricing" allows access to congestion-free express lanes, although users pay an even higher toll for the privilege. This is happening on public toll roads that taxpayers bought and paid for generations ago.

MotherJones magazine (January/February 2007) destroys the false promises of toll road privatization so desperately sought by Governor Corzine. The bottom line is that Goldman Sachs is promising New Jersey quick cash in exchange for control of public infrastructure, including toll roads, but soon airports as well.

Goldman Sachs operates as lobbyist, advisor and investor in selling public assets at fire sale prices - completing the three act play known as "Conflict of Interest." Perhaps the play should be presented in four parts, with Governor Corzine playing the lead role for his former paymaster. And who is Goldman Sachs? In 2006, Goldman paid its executives $16.5 billion; the average salary at Goldman is $623,000. A confraternity of the super rich has New Jersey's public wealth in its gun sights, but New Jersey must protect its transportation infrastructure from Wall Street snake oil salesmen.

Corporations have no duty to the public. They exist for profit, not public safety or security. Transportation infrastructure belongs to the people of New Jersey, who rightly expect that public servants will operate pubic property for the benefit of the people. Does MIG Cintra have its own police force to patrol these roads? Who will the police answer to when the Turnpike is sold, a corporate board of unaccountable, non-elected businessmen? When there's an accident, who responds? If deadly chemical, biological or nuclear agents are released on the Turnpike, will MIG Cintra's executives and Goldman Sachs' investment bankers respond in space suits to protect our citizens?

Governor Corzine insists that complicated issues are at hand. Is that really so? Goldman Sachs already worked these issues out in Indiana and Illinois. How much is at stake? The risk to New Jersey is immeasurable in lost jobs, safety and profits, but profits for Goldman and its investors are huge. Goldman's calculations on other deals show that investors break even after fifteen years but these deals last 100 years, which proves that Goldman orchestrates public asset sales at bargain basement prices. In reality, it's fraud. Profit estimates also assume significant toll increases every year or every other year. These deals allow private owners to operate public roads as monopolies for 85 years.

As Governor Corzine arranges the sale of the Turnpike, you can rest assured of two things: Turnpike tolls will climb every year, and New Jersey politicians will make the super rich even richer by giving them the roads you own. For political cover, the Governor may choose another investment bank, or require Goldman to partner with another bank. The rotten result for us is the same. If that's good public policy, I'm proud to be thick-headed.

Governor Corzine, Ray Lesniak, and Bill Gormley are desperate to sell the Turnpike. They whine that toll increases are intolerable, that maintaining toll roads costs too much. So they won't raise tolls. Rather, they'll sell the roads to private operators, and let them raise the tolls. In reference to privatizing the Turnpike, Mr. Lesniak has said "we are going to allow tolls to go up every year." Where is the public benefit? A few dollars in property tax relief? It's not worth it.

Aren't Democrats against selling out our public wealth, not to mention our safety, to private corporations? Don't Democrats oppose privatizing Social Security? Isn't toll road privatization the same thing? Our toll roads are vital, money making assets, but privatizing toll roads is the public finance equivalent of strip mining, which permanently destroys the environmental infrastructure level by level.

We can't trade transportation infrastructure for a few bucks up front, because, in the end, we'll be much poorer, and much less safe.

Anthony Cowell is a writer and a lawyer, and was a Deputy Attorney General in New Jersey. He can be reached at cowellma@verizon.net.

© 2006 CounterPunch: www.counterpunch.org

Regional Mobility Authority resorts to fundraising gimmick to promote TxDOT's RFID Toll Tags

CTRMA launches TxTag fundraiser program

12/27/06

by Ashley Richards
Hill Country News
Copyright 2006

With the opening of the 183A toll road approaching, the Central Texas Regional Mobility Authority is launching a TxTag fundraising opportunity for local community organizations.

“The charity or organization will be giving out information and talking to their neighbors, friends, family or coworkers,” said Steve Pustelnyk, CTRMA communications director.

Pustelnyk said organizations located within the Cedar Park, Leander and Liberty Hill zip codes are eligible to apply for the program. Participating organizations will be issued a promotional code that will allow CTRMA to track the number of customers a group signs up for TxTag.

Organizations will receive $2 for each TxTag registered under their promotional code between Jan. 1 and June 30. TxTags will not be distributed by the organizations; rather they will offer information about the TxTag program and provide customers with the promotional code to use when registering the tag online or over the phone.

TxTags typically cost $9.65 but during this promotional period the tags will be free to all customers. In order to register a tag, customers must make an initial payment of $20 into their account, which will be used to pay tolls.

TxTag is an electronic sticker that must be placed inside the windshield beneath the rearview mirror. When approaching a toll booth, drivers with an active TxTag account can pass through the plaza without stopping or slowing down and the toll is deducted from the account. The tags are valid for use on toll roads throughout Texas and TxTag customers receive a 10 percent discount on the tolls.

The 183A toll road is scheduled to open in March 2007 with reduced toll fees being offered through July 2007. Once the promotional tolls expire, TxTag customers will receive the traditional 10 percent discount.

The first toll plaza northbound drivers will pass is located near the Lakeline Boulevard intersection will be an electronic-only toll. Pustelnyk said because only TxTag payment will be accepted at this location (a $0.45 fee deducted from the account), cash-paying customers must exit and reenter the highway further north.

“That's another reason why we're encouraging folks that live in that area to purchase a TxTag,” Pustelnyk said. “It's a convenience factor to have the TxTag.”

The main toll plaza, located after the Park Street intersection, accepts both TxTag and cash payment ($1.35 for TxTag, $1.50 cash).

On June 30, CTRMA will review the promotional code accounts for each participating organization to determine the the number of TxTags active under the codes in order to distribute checks to the organizations in early July. TxTags must be active on June 30 in order for an organization to receive credit for registering the account.

Charities or organizations that want to get involved in the fundraising opportunity can contact CTRMA at (512) 996-9778.

© 2006 Hill Country News: www.hillcountrynews.com

"From the standpoint of homeland security, this plan is a nightmare."

Crossroads of conflict

(Part 1 of 3)

World Trade Bridge has changed the U.S.-Mexico border, for good and bad

12/27/2006

By Sara A. Carter
Daily Bulletin (Ontario, CA)
Copyright 2006

LAREDO, Texas The mammoth globe on the World Trade Bridge spins in the glow of the Texas moon, welcoming hundreds of cargo trucks from Mexico to the United States' largest inland port.

Nighttime is the slowest time for the bridge.

Traffic between Laredo and Nuevo Laredo, on Mexico's side of the bridge, is only expected to increase in coming years with Mexico anticipating billions of dollars in new trade, mainly from China, on its way to the United States, according to a U.S. Drug Enforcement Administration executive summary.

Increasing trade has, however, been matched by growth in corruption and death in both border cities, though U.S. and Mexican officials are loathe to admit it.

The prospect of expanded trade in Mexican states controlled by some of the country's most dangerous cartel leaders could pose serious national security challenges for the United States, an internal DEA report obtained by the Daily Bulletin explains.

The report, which has never been released, examines how already strained federal law enforcement agencies monitoring border security and narcotics will be challenged by not only Mexican and South and Central American drug trafficking organizations, but also by Asian cartels.

With slim resources to monitor cargo and inadequate border security measures in place, it will be next to impossible for U.S. agencies to stem the tide of contraband expected to enter the country from Mexico, the DEA report warns. Agencies will be hard-pressed to monitor the billions of dollars in contraband expected to enter the nation if U.S. officials don't take heed.

"Contraband can be anything from narcotics, pirated videos, humans or weapons of mass destruction,'' said David Monnette, spokesman for the DEA in El Paso, Texas. "These drug-trafficking organizations know that we are spread thin, and many times they use legitimate trade routes to move their contraband into the United States. This report explains the possible dangers of not addressing these issues.''

Trade route

A joint venture of Texas and the Mexican government, La Entrada al Pacífico (Gateway to the Pacific) which also is the title of the DEA report is meant to get more goods from Asia north into the United States.

The plan which involves redirecting more than half of East Coast-bound Asian cargo from the ports of Long Beach and Los Angeles to Mexico will stretch the power of Mexican cartels while aligning them with Asian drug-trafficking organizations, according to the DEA report. That report focuses on the Mexican port of Topolobampo, Sinaloa, on Mexico's southwestern coast.

But Topolobampo has taken a back seat during the past year to another port, Lázaro Cárdenas, just 72 hours from Laredo.

Lázaro Cárdenas, the deepest container port on the Pacific, is in southern Mexico, in Michoacán. The volume of re-routed trade through it is expected to explode within the next four years.

And that's troubling to U.S. authorities.

"The (plan) represents an expanding threat to the U.S. for drug, weapon and alien smuggling, as well as related crime, through a 260-mile stretch of Texas into the heartland of the U.S.,'' the report states. "(Drug trafficking organizations) will be able to exploit the new corridor through the use of established smuggling networks and associations with Mexican drug trafficking organizations.

"They may evade U.S. law enforcement under the guise of the North American Free Trade Agreement (NAFTA) and use established Asian communities in the U.S. for the distribution of drugs.''

Piggy-backing

Ninety percent of all non-domestic narcotics enter the U.S. through the Mexican border, according to a 2005 U.S. State Department report.

Drugs are a multibillion-dollar industry for cartels in Latin America. The National Drug Intelligence Center conservatively estimates more than $108 billion roughly equal to the combined gross domestic product of Ecuador and Guatemala in drugs comes into the U.S. yearly. The U.S. Drug Enforcement Administration puts the figure at $142 billion in drug trade just between the U.S. and Mexico. Other estimates soar even higher.

"NAFTA has made smuggling drugs across the border easier by several means,'' including via cargo trucks, the DEA report notes. "The volume of truck traffic coming across the border necessitates the expediting of inspections to the point that few trucks are thoroughly inspected.''

More than 9,300 commercial trucks, carrying everything from piñatas to electronics, pass through Nuevo Laredo into Laredo each day, according to U.S. Customs and Border Protection officials. As cargo shifts from Los Angeles to Mexico, it is expected to triple the amount of traffic moving from Mexico through the Texas highway system.

At the same time, drug cartels are using the trucks to piggy-back more than $10 million a day in drugs through the Laredo corridor into the United States, according to senior DEA officials interviewed by the Daily Bulletin.

The numbers aren't surprising, said TJ Bonner, president of the National Border Patrol Council. In July, Bonner testified before Congress that less than 5 percent of the 6 million cargo containers entering the U.S. each year are physically inspected by U.S. Customs and Border Protection agents.

"From the standpoint of homeland security, this plan (Gateway to the Pacific) is a nightmare,'' Bonner said. "Any possible benefit of expedited trade is going to be totally eclipsed by the increased amount of contraband ... slipping across borders.''

Hidden among the televisions, piñatas and clothing are heroin, cocaine and methamphetamine, law enforcement officials say. Worse are weapons and people, and the possibility of terrorist organizations using gaps in border security to put their agents in the United States. "... All such ventures have one common factor: They have to cross the border from Mexico into the U.S., and they will use one of several corridors available to do so,'' the DEA report points out. ``La Entrada al Pacífico is one of the corridors.''

The Bridge

With the ports of Long Beach and Los Angeles already stretched to capacity, Lázaro Cárdenas' ability to handle billions of dollars worth of cargo from Asia is proving a godsend to global corporations and city leaders in the American southwest.

For their part, Port of Los Angeles officials say they don't expect the Mexican port to siphon off anywhere near the amount of cargo called for in the Gateway to the Pacific Plan, though they admit business is booming.

Theresa Adams Lopez, the L.A. port's media director, said she disagrees with the assumption that half of the Asian cargo headed to Los Angeles will be diverted to ports in Mexico.

"Our cargo is expected to double and triple in the upcoming years,'' she said. "The bulk of it is still going to come in through the Port of L.A. and through our partner, the Port of Long Beach.

"A lot of the problem with new developments like the one in Mexico is the infrastructure rail and roads to get things out. Coming here is literally one stop, and going there would be two stops first from their original destination, and then through Mexico to the United States.

"There is plenty of cargo to go around,'' she said. "But the contention that half of our business will go away is not true.''

Regardless, Laredo officials are pinning their hopes on increased port business, and tout the World Trade Bridge and its ability to handle cargo from places like Lázaro Cárdenas as the lifeblood of Webb County, Texas.

Born out of NAFTA, the bridge signaled the beginning of a bright future with Mexico as a significant partner in North American trade.

According to a 2004 U.S. Census Bureau report, the most recent data available, the Port of Laredo handles more than $130 billion worth of goods and merchandise each year. Nearly 86,000 transportation jobs have been created since the World Trade Bridge was built. More than 90 percent of the truck traffic between Laredo and Nuevo Laredo goes over it.

Expansion of Lázaro Cárdenas will allow delivery of cargo to the East Coast via the World Trade Bridge four to five days faster than from California, say proponents of the plan especially officials in Laredo, which benefits every time traffic and trade increase.

"NAFTA started moving Laredo away from being the frontier land to the center of something very significant,'' said Roger Creery, executive director of the Laredo Development Foundation. ``We're not the U.S. vs. Mexico vs. Canada anymore. We are the Americas.''

Even as Congress held numerous immigration field hearings during the summer to determine the extent of security failures at the U.S. border, private corporations, local and federal government officials and international investment corporations were planning for trade expansion.

Those plans include finishing the Trans-Texas Corridor, which would open the highways to future shipping of cargo from Lázaro Cárdenas, whose biggest investors are Hong Kong-based Hutchison Port Holdings Group and Wal-Mart. Those two firms already have invested more than $300 million to expand the container port.

For many business and political leaders, the economic growth promised by Gateway to the Pacific and the Trans-Texas Corridor outweighs any perceived danger about national security or increased drug trafficking.

That philosophy seems to be heard even in the words of former Laredo Mayor Elizabeth Flores, who was criticized publicly earlier this year for playing down the escalation of violence in Nuevo Laredo.

"We've lived with the cartels all of our lives,'' Flores said in an interview a few weeks before she left office. ``They are a part of life on the border. Eventually, one will take control, and the killings will slow down.''

The business Lázaro Cárdenas will bring to Laredo and Nuevo Laredo could transform both cities, Flores added.

"It's about growth, not death,'' she said.

With billions of dollars in legal trade at stake, bad publicity simply isn't something business leaders or politicians are willing to acknowledge, others say.

"See no evil, hear no evil,'' said Webb County Sheriff Rick Flores, who testified before Congress numerous times this year about growing violence in Laredo, the county's largest city, and along the border. "That's the way they want it, and that's what they have done.''

Violent Neighbor

Lost in the talk about bigger business and improved trade is the picture of life on the street in Nuevo Laredo.

The drug cartels have compromised truck drivers, U.S. Customs inspectors at ports of entry and business owners on both sides of the river, according to residents and law enforcement officials.

And then there are the killings, which come on a stunningly regular basis.

The sound of gunfire in the distance doesn't seem to shock residents in the heart of Nuevo Laredo. Many of their homes are fortified with thick cement blocks, iron gates and barbed wire protection from the high-powered weapons used by the cartels.

"The government is owned by the cartels,'' said an older woman returning home. "As the trucks make their way to America freely, we are forced to live like animals. While the rich get richer, we are here dying, and nobody really cares.''

Residents in Nuevo Laredo say that the violence has only become worse over the past year. Expansion of trade routes will only heighten the tension and violence among Mexico's cartels, they contend.

"They want to control the routes into the United States,'' said Nacho, a Nuevo Laredo resident whose real name was withheld to protect his identity. "In a way, they already do. And U.S. officials should be worried, because the cartels will do anything for money. They will kill anyone, help anyone, do anything to get what they need to move contraband across the border for the right price.''

The DEA report echoes what Nacho and other residents believe. The possibility of a "direct, nearly inspection-free route to the central U.S. and expanded market for drugs'' has or will result in the following, according to the report:

• Networks created by Mexican and Asian organized crime organizations to smuggle illegal aliens, counterfeit products and pirated intellectual property into Mexico.

• Cargo containers being used to smuggle drugs into the U.S.

• Distribution networks being created by Asian gangs in communities.

• Creation of legitimate businesses in the U.S. to cover up smuggling, contraband and money laundering.

• Expedited truck inspections ``to keep substantial backup of trucks from regularly occurring.''

The cartels' reach extends well beyond the streets and people of Nuevo Laredo and the border, however.

On Dec. 12, newly elected President Felipe Calderón sent more than 6,500 troops to Michoacán, where the Port of Lázaro Cárdenas is located, in an effort to get a handle on the growing violence.

Calderón also transferred 10,000 troops from the army and navy to the federal police force on Dec. 13, the largest move against narcotics traffickers since his predecessor, former President Vicente Fox, sent nearly 1,000 troops to Nuevo Laredo to squelch a drug war that has killed more than 3,000 people across the country during the past two years.

Calderón may have learned how deadly dealing with the cartels can be. First Lady Margarita Zavala, Calderón's wife, lost her cousin, Luis Felipe Zavala, on Dec. 12 when gunmen open fired on his SUV in Mexico City.

According to DEA intelligence officials, Zavala's assassination was retaliation for Calderón's promise to take down Mexico's drug kingpins. "It was an assassination of opportunity,'' said one DEA intelligence official who requested anonymity. "... It was directly related to Calderón's move into Michoacán.''

However, Mexico's attorney general, Eduardo Medina Mora, told reporters the incident was a coincidence.

"There is at this time no indication ... that would suggest or make us guess that this unfortunate event was related to the Mexican government's efforts against organized crime,'' he told reporters at a press conference a day after the killing.

Since the Sept. 11, 2001, attacks, the Department of Homeland Security has tried to beef up security along the border. Officials say new technologies radiation portal monitors, hand-held radiation detectors and X-ray machines assist front-line agents in detecting dangerous materials that may be in trucks at ports of entry.

U.S. Customs and Border Protection spokesman Pat Jones said striking a balance between increased traffic and inspections is challenging. New programs implemented by the Department of Homeland Security have assisted in better checks at ports of entries along the southwest border, he said.

"It may be possible to improve the flow of legitimate trade and improve security,'' Jones said. ``Prior to 9/11, the thought was that if you improve security, you're going to slow down cargo trade. We've learned that if you actually could identify and separate the risk-free cargo, the flow of cargo could be expedited.''

But once the illegal cargo finds its way into the U.S., there's little law enforcement can do.

Laredo police can barely keep up with the violence spilling into their community from their sister city across the border. Sheriff Flores said growing violence and corruption in Mexico is spilling into the U.S. and becoming increasingly difficult to manage.

"The cartels have more power, money and weaponry than we do,'' he said. ``The cartels know how to get their narcotics across the (World Trade) bridge. They're not afraid to lose some of their loads; they expect it. The risk is worth it because the possibility of getting caught is minimal, at best.''


BY THE NUMBERS

$142 billion in drug trade between the U.S. and Mexico, according to the U.S. Drug Enforcement Administration.

86,000 Transportation jobs created as a result of the World Trade Bridge.

9,300 Commercial trucks pass through the World Trade Bridge daily.

90% of all drugs smuggled into the United States enter through its border with Mexico.


About the reporter

Sara Carter has been a staff writer at the Daily Bulletin since 2003, and currently covers immigration and ethnic affairs.

While a city hall and general assignment reporter, she wrote stories that won regional, state and national recognition, including a National Headliner Award.

As an immigration reporter, Sara has become a recognized authority on border security issues, and has appeared more than 25 times on television news programs (CNN, MSNBC, Fox News) to speak on the topic.

A graduate of Cal Poly Pomona, Sara also is fluent in Spanish.

She is the daughter of a Cuban mother who immigrated to the United States in the late 1960s.


© 2006 Los Angeles Newspaper Group: www.dailybulletin.com

Texas Reps plot to oust their "Auto-Craddick" Speaker

McCall thinks he can oust Craddick as speaker

Dec. 26, 2006

By LISA SANDBERG, Austin Bureau
Houston Chronicle
Copyright 2006

AUSTIN — The lawmaker running against House Speaker Tom Craddick said today he's confident he's already secured the votes to be the next speaker, though he wouldn't say how many pledges he's gotten from members.

"I'm getting a very good response," Brian McCall, R-Plano.

McCall said he's been calling fellow lawmakers since Friday to win backing for his candidacy and that he's been promised support from many of the 109 members who signed pledge cards for Craddick last month. Seventy-six votes are needed to win.

He also said people are fed up with what he characterized as Craddick's "(my) way or the highway" style.

McCall filed the necessary papers for the speaker's race on Friday.

The 16-year House veteran described himself as a social conservative who agrees with Craddick on major policy issues. But he said under his leadership, members would be treated with more respect with him as speaker.

"Members would be allowed to vote their districts and their conscience," he said. "The speaker would take a back seat."

A political consultant close to Craddick, meanwhile, dismissed McCall's chances of prevailing as speaker.

"He's never even been a chairman," Bill Miller said of McCall.

Rep. Garnet Coleman, D-Houston, is one of the most liberal House members, but he said he would vote for McCall if speaker candidate and fellow Houston Democrat Rep. Senfronia Thompson releases him to do so.

''Clearly there's momentum for change, and that's what's important here," he said. ''Even though Brian is conservative and a lot more conservative than I am, I think he'll be fair as speaker.

Coleman echoed others who said they are sick of Craddick's ''autocratic'' style.

''Speakers ought to be people who, if the members elect you, you serve the members and the interests of the members,'' he added. ''Craddick has not served the member's interests. He's served his own interests. The members are disposable.''

The House speaker is chosen by 149 other state representatives at the beginning of every legislative session. The speaker appoints legislative committees and influences which bills come to the floor for debate — and which never make it.

Republicans now hold an 81-69 majority in the House.

lisa.sandberg@express-news.net

© 2006 Houston Chronicle: www.chron.com

TTC opponents vow to file bills that would roll back TxDOT's power to build toll roads

Area leaders ready for Capitol battle

December 26, 2006

Fort Worth Star-Telegram
Copyright 2006

Metroplex leaders are heading to Austin next month, and they say one of their priorities is protecting the region's transportation interests.

Transportation may be high on the list of topics, too. For example, opponents of the Trans-Texas Corridor have vowed to file bills that would roll back some of the Texas Department of Transportation's power to build toll roads -- or to hire private companies to do the work for them.

North Texas was really the first region in the state to embrace tolls and other alternative forms of road financing, so any changes in the rules at this point could have a major impact on Metroplex road work.

But there's a plethora of other issues, too. Here's a sample of the region's agenda:

Stop diverting highway taxes and fees to other state needs. For example, nearly a fourth of state gas taxes go toward education.

Clarify state law so that future surplus toll revenue stays in the region where it's collected.

Give agencies more bureaucratic flexibility to design, build and manage roads.

Increase the state motor fuels tax, now 20 cents a gallon, and let it rise periodically proportionate to economic growth.

Allow local elections to raise the state's 8.25 percent sales-tax cap, freeing up a half-cent for transportation.

Allow extra-large trucks -- aka triple-tandem trucks -- to use the Trans-Texas Corridor but not other roads.

Oppose attempts to assess state fees on cities' revenue from red-light cameras.

Allow driver's license suspensions for failure to pay tolls.

Identify new sources of money to move rail lines out of congested areas.

Oppose creation of transportation authorities other than the three already in the region: Fort Worth Transportation Authority, Dallas Area Rapid Transit and Denton County Transportation Authority.

Allow the Transportation Department to buy land from a willing seller before a road project has completed environmental review.

Allow any court with jurisdiction, not just county courts of law, to hear eminent-domain cases.


© 2006 Fort Worth Star-Telegram: www.dfw.com

"In recent meetings, when toll roads have come up, it's been difficult to spot more than a handful of members wholeheartedly in support of them."

2006: Toll roads under the tree

December 25, 2006

Ben Wear
Austin American Statesman
Copyright 2006

Let's be frank: It's Christmas, and the overwhelming majority of you probably aren't thinking about transportation much this morning. Other than one particular journey that involved a donkey.

But this afternoon, unless this newsprint gets swept up with the ribbons and wrapping paper, maybe you'll be ready for a look back at the year in transportation and a brief look ahead.

The 41 miles of toll road that opened in the Austin area this year have been free so far. At the southbound entrance from U.S. 79 to Texas 130 near Hutto, plaza supervisor Sandra Hughes waved drivers on.

The year just expiring, at least in Central Texas, was one of culmination and, for many transportation advocates, consternation.

The Texas Department of Transportation opened up 41 miles of toll road in the Austin area, with 25 miles more on deck for completion in 2007. The agency's much younger sibling, the Central Texas Regional Mobility Authority, likewise is closing in on opening its own toll road.

And Capital Metro, though still about two years from opening its commuter rail line from Leander to downtown Austin, culminated a 20-year local public wrangle on passenger rail by actually ordering train cars (from Switzerland!) and beginning to build stations and new track.

The consternation? Well, while all those toll roads have opened and are about to open around here, plans for a second round of tollways have been up on the blocks politically.

As for Capital Metro, plans for a second rail election in November (for a downtown Austin streetcar system) fell off the track early in 2006.

And, with its union still restive, federal funding drying up, its own previously robust bottom line tightening and local political support in question, it's by no means clear that such an election will happen in 2007. Or that voters would say yes.

The upshot, unless the return of master mover-shaker Kirk Watson to the scene as a state senator changes things, is that what have been a very busy few years in transportation around here could hit a lull late in the decade.

Take a free ride

Unquestionably the most significant transportation event of the year locally was the opening Oct. 31 and Dec. 13 (for a second piece) of 41 miles of tollway.

The three roads — Loop 1 extension, Texas 45 North and Texas 130 — are free to drive until Jan. 6, when cash customers will begin to pay. Motorists with electronic toll tags will begin paying their full price (90 percent of the cash price) in March.

Construction continues on a small piece of Texas 45 North's western end, where it will connect to the 183-A tollway to Cedar Park when it opens in March. And it will be late in 2007 before the opening of the other 20 miles of Texas 130, completing the 49-mile road.

The beginning of the end of Austin's first phase of toll roads should happen this summer, when construction is likely to start on a fifth tollway, Texas 45 Southeast. That 7.4-mile road, along with Texas 130, would allow travelers to bypass the Interstate 35 mess through Round Rock and Austin.

Phase too much?

A second round of five toll roads, first introduced and then quickly approved by the Capital Area Metropolitan Planning Organization board in 2004, got deeper in trouble as 2006 moved along.

The 23-member CAMPO board has seen considerable turnover in the two years since that first vote. Now a move is afoot to trim the board to 18 members.

In recent meetings, when toll roads have come up, it's been difficult to spot more than a handful of members wholeheartedly in support of them.

The board through most of this year managed to delay a key vote that would have reconfirmed toll plans for sections of U.S. 183, Texas 71 and U.S. 290 (in both East and Southwest Austin) and the proposed Texas 45 Southwest.

Supposedly, the delay was tied to the November release of a $300,000 consultant study on the Phase 2 plan. But that plan provided no definitive direction.

Now, the buzz is that Senator-to-be Watson — his new office comes with a seat on the CAMPO board — has been effecting a sort of shuttle diplomacy on the issue in recent weeks.

The expectation (hope?) is that when Watson (as is generally assumed) takes over in January the chairmanship of what could become a much different CAMPO board, he'll find a way to split the baby. We'll see.

39 percent solution

The November gubernatorial free-for-all became something of a toll road referendum, with Gov. Rick Perry for them and his three main opponents agin 'em.

A series of 55 public meetings this summer on the corridor plan (part of a federally required environmental study) provided a perfect forum for Republican-turned- Independent candidate Carole Keeton Strayhorn to bash Perry on the issue. She had her say at almost 20 of the meetings, and Perry was hurt by the issue.

But he won anyway, albeit with just 39 percent of the vote.

So Perry, who truly believes in toll roads and in allowing private companies to build and run them in the state's stead, is unlikely to deviate much from his position on tolls.

One caveat: A late November report from the Governor's Business Council, an independent group peopled by Perry supporters, recommended indexing the gas tax to inflation to avert the need for a good chunk of new toll roads. The report, and reaction to it in the Legislature, could cause some tempering.

Rail travails

Work continues quietly, with no apparent bumps, on the 32-mile line from Leander that will open in late 2008. The first of six diesel-powered cars should arrive late this year, and station construction has begun.

But the introduction in April of a potential second phase of rail, a streetcar line from downtown to development at the old Mueller airport site, elicited mostly yawns.

And funding — it would cost about $230 million, in Capital Metro's current estimation — is a huge question. Capital Metro, even without investing some of its sales tax money in future rail construction, says it must trim labor costs.

So it wants help from local governments, particularly the City of Austin, and concessions from the union that represents two-thirds of its work force.

Neither entity seems anxious to help in that manner. And some of the agency's left-leaning political base remains unhappy about how the agency is handling its labor questions.

State law requires the agency to get the public's permission in an election if it wants to build more rail and, in a separate vote, borrow money by selling bonds.

Capital Metro has considerable fence-mending to do before the time might be ripe to ask those questions.

— Getting There appears Mondays. Contact Getting There at 445-3698 or bwear@statesman.com.

© 2006 Austin American-Statesman: www. statesman.com

"The wisest way to conquer an enemy isn't with bullets or bombs."

A key example of trade deficit is privatizing state highways

December 24, 2006

By MATT TOWERY
The Florida Times-Union
Copyright 2006

As a component of George W. Bush's world of "globalism," the status and health of the U.S. dollar deserves close scrutiny, closer than my mention of it in a recent column.

As I've written, China is now the holder of an incredible stash of dollars. Some reports have their cache valued at over $1 trillion.

You don't have to be an economics professor to worry about numbers like that.

That's quite a fistful of dollars for a burgeoning superpower nation whose ultimate geopolitical goals have always been suspect. China, conceivably, could put the U.S. economy in peril if it chose to dump these dollars on the open currency market.

So it's ironic that China and the United States suddenly find themselves sitting with each other in a small life raft.

This week, Iran and Venezuela - both avowed foes of America - announced that they'll no longer take dollars as payment for their considerable oil sales. They want euros instead.

This is no small event. The idea that the U.S. dollar is no longer a currency of preference puts increased pressure on China to avoid seeing the dollar devalued - they hold too many of them.

This increases America's vulnerability to China's whims. Should they ever decide to dump dollars on the international market, the value of the greenback would plummet.

This begs a broader question. Is the dollar really strong today? Probably not.

This isn't a spooky tale of woe worthy of "Trilateral Conspiracy" theories. It's simply a matter of fact that America's current national debt is over $49 trillion, according to the General Accounting Office's 2005 numbers.

Believe me, we don't have anything like that kind of money.

And the only way to come up with it is to stamp endless reams of paper with oceans of green ink and call them dollars. That means further devaluation for months, probably years to come.

We are in no way the masters of our own destiny here.

Indeed, individual American states dependent on federal spending are now having to turn over publicly built roads and tollways to the highest private bidder - often foreign companies.

For example, in Indiana, a consortium of foreign investors bought 75-year rights to a toll road for $3.8 billion.

Reportedly, the contract even exempted them from state and local taxes.

Texas has greenlighted the construction of a private toll road out of Austin. It, too, is a long-term deal with toll proceeds earmarked for foreign coffers.

Indiana and Texas are not alone. One at a time, states are learning that promised huge transportation funds from the federal government won't be forthcoming. The money just isn't there.

Why my emphasis on roads? Because they're a symbol of American strength.

Given that, it's not hard to imagine that states may increasingly react to Uncle Sam's lighter wallet by deciding to privatize other essential infrastructure.

Publicly owned power plants or water-treatment facilities, perhaps, or other necessarily big-dollar entities potentially may become private businesses in the years to come, and often foreign-owned.

We're a nation forced by debt to allow countries like China to undercut our prices of domestically produced manufactured goods. That means our tradition of world dominance in making "things" is a thing of the past.

In essence, we're now being held hostage by oil-producing enemies. Their weapon of choice isn't the nuclear bomb. It's the slow erosion of our international monetary and manufacturing strength.

It shouldn't have been a shock to anyone this week when we learned that our trade deficit is even bigger than we thought.

If it's not a maxim already coined, allow me: The wisest way to conquer an enemy isn't with bullets or bombs.

The most lethal "trigger" is mastery of monetary system imbalances.

Times-Union columnist Matt Towery can be e-mailed at mtowery@insideradvantage.com.


© 2006 The Florida Times-Union: www.jacksonville.com

"Politicians may love to sell roads, but the public isn't buying."

We're on the road to nowhere

December 24, 2006

Paul Mulshine
The Star-Ledger (New Jersey)
Copyright 2006

Though he has not yet been in office for a year, Jon Corzine already holds the record for the leakiest trial balloon in New Jersey political history.

That would be his proposal to put tolls on the state's freeways. That idea went nowhere fast, but the guv still needs money to maintain the spending spree that the state has been on for this entire century. If you can't make new toll roads, how about selling the old ones?

I suspect the plan to sell the New Jersey Turnpike may run out of air almost as quickly as the prior effort. New Jersey selling the Turnpike? That would be like Texas selling the Alamo. It would be like South Dakota selling Mount Rushmore. Every state has one central symbol, an artifact by which it is known to the rest of America. The Turnpike is ours.

The Turnpike is "so unbelievably awful, it's wonderful," in the words of Jim Coleman. He is an art photographer who was quoted in the 1989 book "Looking for America on the New Jersey Turnpike" by Rutgers professors Angus Gillespie and Michael Rockland. The two professors of American studies devoted 198 pages to describing the role the Turnpike plays in the mythos of the state and the nation.

"New Jersey is a centrifugal state, with few forces holding it together," they wrote. "There is little sense of community, of belonging, except on the local level. The Turnpike, therefore, plays a unifying role. It is New Jersey's automotive Mississippi."

I got Rockland on the phone the other day and asked him what he thought of selling the state symbol.

"Well, in the old days way, way back, turnpikes were private affairs," Rockland said. "On the other hand, it always seems to me: What are we gonna sell next? The Garden State Arts Center was bad enough. And then there was the Brendan Byrne Arena."

His comments frame the debate nicely. It is indeed true that turnpikes began as private roads. And it's also true that there is much to be said for private operation of such a road. In the hands of the politicians, the toll roads are patronage machines, convenient places to stash freeloaders and freeholders between election campaigns.

But that could be remedied without selling the road. The state need only hire a contractor to run the highway. The resultant savings would help avoid future toll hikes. Problem solved. Only that's not the problem they're solving. The problem is that the state government is broke. For years now, politicians of both parties have been handing public workers benefits the state can't afford. The pols have also been borrowing for big school construction projects that keep the contractors and urban political machines happy. So the state budget is permanently out of whack.

The way to deal with this is to cut costs. But as we've seen in the past few weeks, Corzine's no Scrooge. He's Santa Claus, and he'll be coming down a lot of chimneys tonight in the homes of public employees and public contractors.

Corzine is borrowing. And he's spending. Just the other day, Corzine was boasting of borrowing $270 million for stem cell research. And his fellow Democrats want another $12 billion for urban schools. Where's the money coming from? Time for a one-shot. In Trenton terms, a "one-shot" is a deal that gives a governor a lot of money instantly by selling off some asset. Jim McGreevey was the king of the one-shots. He raised billions by borrowing against future revenues for everything from the cigarette settlement to traffic tickets. He was like an indebted gambler whose pawnshop was on Wall Street.

Toward the end of McGreevey's reign, the state Supreme Court put a stop to the practice of bonding to balance the budget. And technically the proposed sale, which would include the Parkway and probably the Atlantic City Expressway as well as the Turnpike, would not violate the letter of the law. But as for the spirit of the law, that would be run over like a fawn in the fast lane.

Though this deal should be resisted on fiscal grounds, I suspect the public will find other reasons. State Senate Minority Leader Leonard Lance argues that toll hikes would have to be permitted under the conditions of any sale. Truckers would seek alternate routes, such as crowded Route 31 through the heart of Lance's district in the western part of the state. "Tolls should be tied to transportation needs, not to outside profits," the Republican argues. I suspect most drivers agree. It's one thing to pay tolls for the maintenance of a road. It's quite another to pay tolls for the maintenance of the lifestyle of a state worker who decides to retire at 55.

Then there are all the other pitfalls of the plan, such as the new owner's likely insistence on a noncompete clause: The state would be prevented from improving public roads that might draw drivers away from the toll roads.

The experience with the sale of toll roads in Illinois and Indiana shows drivers dislike the entire experience. Politicians may love to sell roads, but the public isn't buying.

Paul Mulshine is a Star-Ledger columnist. He may be reached at pmulshine@starledger.

Copyright 2006 The Star-Ledger. Used by NJ.com with permission.

© 2006 The Star-Ledger: www.nj.com